Running a restaurant means juggling a dozen things at once—managing staff, keeping customers happy, dealing with health inspectors, and somehow staying profitable. Insurance probably isn't at the top of your priority list. But here's the thing: one kitchen fire, one customer slip-and-fall, or one burst pipe could shut you down for weeks or even permanently if you're not properly protected.
That's where a Business Owners Policy (BOP) comes in. Think of it as a bundle deal for the insurance protections most restaurants absolutely need. Instead of buying general liability and property coverage separately, you get both in one package—usually at a lower price. It's designed specifically for small to medium-sized businesses like yours, and it streamlines your coverage so you're not managing multiple policies and renewal dates.
What's Actually Included in a Restaurant BOP?
A BOP combines three core coverages that every restaurant needs:
General liability insurance protects you when customers or third parties get hurt on your property or claim your business caused them harm. A customer trips over an uneven floor tile and breaks their ankle? Your policy covers their medical bills and any lawsuit that follows. Someone claims they got food poisoning from your lunch special? That's covered too. This is the protection that keeps you from paying out of pocket when accidents happen—and in the restaurant business, accidents will happen.
Commercial property insurance covers the physical stuff that makes your restaurant run: your building (if you own it), your kitchen equipment, your dining room furniture, your point-of-sale system, your inventory. When you've got $50,000 worth of refrigerators, ovens, and fryers, plus all your tables, chairs, and food stock, you need protection. If a fire destroys your kitchen or a burst pipe floods your dining room, your property coverage pays to replace or repair everything.
Business interruption coverage is the part people often overlook, but it's incredibly valuable. Say that kitchen fire forces you to close for six weeks while you rebuild. You're not bringing in revenue, but you still have to pay rent, loan payments, and possibly staff if you want to keep them around. Business interruption insurance covers those fixed expenses while you're closed, so you don't drain your savings or go under during the recovery period.
Many restaurant BOPs also include coverage for spoiled food—if your walk-in cooler breaks down and you lose $10,000 worth of inventory overnight, your policy can reimburse you. Some policies offer limits from $10,000 to $100,000 for food spoilage, depending on your needs and what you're willing to pay.
When Does a BOP Make Sense for Your Restaurant?
BOPs are designed for small to medium-sized operations. If you're running an independent restaurant, a small chain with a few locations, or a café, you're probably a good fit. Most insurers look at your annual revenue, the number of locations you operate, and specific risk factors to determine eligibility.
There are some situations where you might not qualify for a standard BOP. If more than 25% of your revenue comes from alcohol sales, some insurers won't offer you a BOP or will require additional coverage. If your building isn't equipped with sprinklers and your total insurable value exceeds certain thresholds (often around $1 million), you may need a different type of policy. And if you're a brand-new restaurant that hasn't been open for at least a year, many BOP programs won't accept you yet—you'll need to get coverage elsewhere until you have some operating history.
But if you're an established restaurant with moderate revenue, a sprinklered building, and reasonable alcohol sales, a BOP is likely your most cost-effective option. You get comprehensive protection without the hassle of managing multiple policies.
What You'll Actually Pay for a Restaurant BOP
Restaurant BOPs typically cost between $214 and $251 per month, which works out to about $2,566 to $3,010 per year. That's an average—your actual cost depends on your location, your revenue, your claims history, and the value of your property and equipment.
Here's the important part: if you bought general liability and commercial property insurance separately, you'd likely pay more. General liability alone can run $900 to $1,691 per year, and commercial property coverage adds to that. By bundling them into a BOP, you're typically saving 10-15% compared to purchasing separate policies. Some restaurant owners report saving $500 to $1,500 annually by choosing a BOP instead of separate coverage.
Where you're located makes a significant difference. Restaurant owners in New York pay around $249 per month on average, while those in North Carolina pay about $183—that's a $66 monthly difference, or $792 per year. Louisiana, New Jersey, and Pennsylvania are also on the pricier end, while Maine, Virginia, and South Dakota tend to be more affordable.
Higher revenue generally means higher premiums because insurers view it as greater risk exposure. The more business you do, the more potential claims you might face. Your deductible choice also affects your premium—most restaurant BOPs offer deductible options of $1,000, $2,500, or $5,000 for property claims. Choosing a higher deductible lowers your monthly cost, but means you'll pay more out of pocket if you file a claim.
What a BOP Doesn't Cover (And Why That Matters)
A BOP covers a lot, but it's not everything. You'll need separate policies for these common restaurant risks:
Workers' compensation insurance is required by law in most states if you have employees. It covers medical bills and lost wages when your staff gets hurt on the job. A kitchen worker burns their hand on a grill? A server slips on a wet floor? Workers' comp handles it. Your BOP won't.
Commercial auto insurance is necessary if you offer delivery or use vehicles for your business. Your BOP doesn't cover accidents that happen when your delivery driver is on the road.
Liquor liability insurance protects you if you serve alcohol and an intoxicated customer causes harm to someone else after leaving your restaurant. If you serve, sell, or allow BYOB, you need this coverage separately or as an endorsement to your BOP.
Cyber liability insurance has become increasingly important as restaurants rely more on digital systems for reservations, online ordering, and payment processing. If you store customer credit card information or personal data, a data breach could cost you hundreds of thousands of dollars. Your BOP doesn't cover that.
Understanding what your BOP doesn't cover is just as important as knowing what it does. Work with your insurance agent to identify gaps and add the endorsements or additional policies you need.
How to Get Started with a Restaurant BOP
Shopping for a BOP is simpler than you might expect. Start by gathering information about your restaurant: your annual revenue, the value of your equipment and inventory, whether you own or lease your space, and whether your building has a sprinkler system. Insurers will also want to know your claims history and any safety measures you have in place, like fire suppression systems or security cameras.
Get quotes from multiple insurers. Premiums can vary significantly based on the carrier, and some specialize in restaurant coverage more than others. Don't just compare the monthly cost—look at coverage limits, deductibles, and what's included or excluded. A slightly higher premium might be worth it if the policy offers better business interruption coverage or higher limits for equipment breakdown.
Once you have your BOP in place, review it annually. As your restaurant grows—whether you add more seating, upgrade your kitchen equipment, or increase your revenue—your insurance needs change. Make sure your coverage keeps pace with your business so you're never underinsured when you need to file a claim.
A Business Owners Policy isn't just a checkbox on your to-do list—it's financial protection that could save your restaurant when disaster strikes. The cost is manageable, the coverage is comprehensive, and the peace of mind is worth it. Get quotes, ask questions, and make sure you're covered before something goes wrong.
